Hi,
I am taking the liberty of sharing this study from 2005 by Naila Kabeer and Helzi Noponen, in PRADAN's program in the State of Jharkhand (predominant indigenous tribal population), where access to finance was created through SHGs, in addition to livelihoods and other social empowerment facilitation. Though dated, this study perhaps captures the essence of what SHG movement in India aspires to be. Currently, app 110 million members participate n SHGs in India across the country, though the quality of groups, cluster organisations, bank linkages, women focus, impacts etc. is quite mixed and variable.
It makes a very useful reading , especially for the uninitiated in the SHG/ community owned MF model. In this case, there is a strong emphasis on working with social excluded / marginalised communities, something we don't always use as a filter. Here is the Social and economic impacts of PRADAN's Self Help Group Microfinance and Livelihoods Promotion Program study link. Hope you find it a useful reference.
Some experts, though there is much more interesting analysis in the study:
Page 3
· Backdrop: "PRADAN is a large rural livelihoods development NGO in India reaching over 80,000 poor women and their households in seven of the poorest states in India: they are mainly in north and east India". "PRADAN's outreach in Jharkhand found that PRADAN reached all but the very poorest 3 per cent of the population in the study location which was characterized by very high levels of overall poverty". "PRADAN's strategy is premised on the belief that microfinance is not an end in itself, but one of a number of inter-related means for strengthening individual livelihood efforts. Other 'means' promoted by PRADAN include technological assistance in subsistence cultivation, market-based agriculture, forestry, animal husbandry, watershed improvements and the development of non-farm individual and group enterprises."
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· Nature of microfinance: "PRADAN seeks to develop self-help groups (SHGs) of women as the loci of microfinance activities. In other words, it is not an MFO, but an organization that facilitates the building up of numerous micro MFOs with the support of its field-based staff (D. Narendranath 2001). In this, it differs from other micro finance models, such as those modeled on Grameen Bank, in which the NGO itself operates as the micro finance organization (MFO). PRADAN has a two-pronged approach to microfinance service delivery for the poor. On the one hand, it works with the existing banking industry seeking to apply pressures and incentives to persuade it to overcome its reluctance to lend to the rural poor. On the other, it works with the rural poor, seeking to build networks of independently-functioning SHGs and link them to the local banking structure. This means going beyond the setting up and stabilization of groups that are able to carry out basic functions of regular and punctual attendance at meetings, on-time savings and loan repayment, record-keeping and election of leaders. It also means increasing their ability to function as alternative microfinance organizations, recognized by local banks as creditable partners."
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· Livelihood portfolio: "membership of a PRADAN SHG does appear to have an impact on household livelihood portfolios."
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· Agri practices: "PRADAN's support for household livelihoods also takes the form of promoting improved agricultural practices. We see the effects of this in Tables 11, 12 and 13. PRADAN members were able to use their land more intensively by growing a greater variety of crops (e.g. grains, pulses, vegetables, oilseeds, or fruits): the average total was 2.6 crops for members versus 2.2 types for non-members."
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· Assets: "PRADAN households had a greater number and diversity of livestock assets compared with non-members. More PRADAN members owned high value large livestock important to subsistence production and home consumption such as cows, 60.9 per cent, bullocks, 65.6 per cent and buffaloes, 17.2 per cent, compared with non-members at 36.9 per cent, 35.9 per cent and 4.9 per cent, respectively."
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· Savings: "The findings of the survey suggest that as far as impact in relation to savings was concerned, PRADAN members not only reported higher levels of saving on average but also held their savings in a greater variety of forms, an important component of their risk-diversification strategies."
Page 20:
· Debt: The respondents were asked also about different sources from which their households borrowed. Not surprisingly, there were striking differences in the sources reported by PRADAN and non-PRADAN members. The largest number of PRADAN members borrowed from the SHG fund – 74 per cent – followed by SHG-bank linkage: 43.2 per cent. These options were not available to non-members. Instead, the largest number of non-members borrowed from moneylenders at 60.2 per cent. In contrast, only 23.4 per cent of PRADAN members still relied on high interest moneylenders for their credit needs. There were no significant differences between members and non-members in the numbers of households borrowing from other sources. Overall, the number of sampled households who used family or friends was 16.6 per cent; merchants, 13.2 per cent; patron or employer credit, 7.5 per cent; banks, 6.1 per cent; coop credit, 1.4 per cent; and other sources, 1.7%, for their credit needs.
Please read the report for more details.
Anuj
Anuj K. Jain
Sr. Coady Fellow| Microfinance and Development| COADY International Institute
St. Francis Xavier University, Antigonish, Nova Scotia, B2G 2W5| Ph: 902-872-0521
New program offerings in 2015. Apply now to be considered for a scholarship. http://www.coady.stfx.ca/education/apply/
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